BA seeks to shift focus of price-fixing inquiry away from Walsh

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The Independent Online

British Airways is seeking to distance its top management from the price-fixing investigation the airline is facing by pinning the blame on the unauthorised actions of individual executives.

Sources close to the airline maintain there is no evidence to show that the alleged cartel to set fuel surcharges in collusion with other transatlantic carriers was directed from the very top of the company. Rather, they say that the initiative to contact other airlines about upcoming increases in the surcharges appears to have been a "bottom up" exercise.

BA placed its commercial director, Martin George, and its head of communications, Iain Burns, on leave of absence last week after the shock disclosure that the Office of Fair Trading was conducting civil and criminal investigations into allegations of price-fixing by BA after being tipped off by Virgin Atlantic.

The announcement followed a raid on BA's offices nine days earlier by OFT officials. A parallel investigation is being carried out on the other side of the Atlantic by the US Justice Department, which has subpoenaed United Airlines and American Airlines to assist with its enquiries.

BA sources say it appears that Mr Burns was instrumental in the affair by making contact with his opposite number at Virgin Atlantic and then relaying information back up the company to Mr George, who is in overall charge of public relations.

The OFT investigation is being led personally by its chairman, Philip Collins, after the organisation's chief executive, John Fingleton, agreed to step back because of his personal acquaintance with Willie Walsh, BA's chief executive.

Mr Walsh is likely to be interviewed by the OFT as is his predecessor, Sir Rod Eddington, who retired from the airline last September. It is also possible that the OFT will seek to interview Paul Moore, the former head of communications at Virgin, who was with the airline at the time the contacts with BA are understood to have taken place.

BA's handling of the affair is being led by its general counsel, Robert Webb, who previously acted as counsel for Virgin in anti-trust battles with BA.

BA is also facing at least eight private lawsuits in the US, alleging that it violated anti-trust laws by engaging in price-fixing with other airlines. Virgin, American and United have also been named in some of the complaints.

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